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A complete review of the methodology underlying the CGC’s advice to Government on the relative fiscal capacity of States and Territories is conducted every five years. The purpose of the review is to determine the most appropriate methods and data for measuring State and Territory relative fiscal capacity.

A multi-year work program has been developed and agreed in consultation with stakeholders, with the final report due to the Commonwealth Treasurer in February 2020. The CGC is also working with stakeholders to understand the impacts of the recommendations from the Productivity Commission Inquiry into horizontal fiscal equalisation.

NOTICE

The update process is conducted annually and provides recommendations to the Commonwealth Treasurer on the relative fiscal capacity of the States using the latest review methods. Calculations are updated using the latest reliable data for the previous three financial years.

The 2018 Update Report was provided to the Commonwealth Treasurer in March 2018. The recommended relativities will be used to determine the distribution of GST revenue among the States in 2018-19.

NOTICE

The Commission is currently consulting with the Commonwealth and States on new issues for the 2019 Update. Submissions are due on 23 November 2018.

Who We Are

Operating under the Commonwealth Grants Commission Act 1973, we are a small independent statutory authority responsible for measuring the relative fiscal capacity of the States and Territories. The CGC has:

- A Commission which makes decisions about how to measure the relative fiscal capacities of the States

- A Secretariat which is responsible for collecting and assessing data, and undertaking research to provide considered advice to the Commission.

Fiscal Equalisation

Fiscal equalisation makes it possible for every State and Territory to provide similar standards of service (e.g. hospitals, education, social housing, transport and policing) with comparable levels of taxation, whilst allowing the benefits of decentralised governance and administration to be retained.

Some form of equalisation has been in place in Australia since Federation to address both the vertical fiscal imbalance between the States and the Commonwealth, and differences in fiscal capacities across States.

Scam Alert

CGC is warning the public to be wary of unsolicited communication.

You are strongly advised not to give out personal information.

If you are unsure about the legitimacy of a communication you have received which claims to be from CGC, please contact us via secretary [at] cgc.gov.au or call us on (02) 6229 8800. You can also report it as a scam to the Australian Competition and Consumer Commission (ACCC) via the SCAMwatch website, or by calling 1300 795 995.